Trump warns hurricanes will hit US growth

WASHINGTON: President Donald Trump on Wednesday warned that a series of deadly hurricanes will trim US third-quarter growth, hinting it may fall short of his three percent target.

“GDP growth last quarter reached three percent, way ahead of schedule,” Trump said, as he unveiled ambitious tax cuts in Indiana.

“This quarter, I believe, would have been better, but the hurricanes will have an impact,” he added. “It would have been, in my opinion, even better.”

A series of storms have cut through the southeast United States, leaving parts of Houston — the country’s petrochemical hub — under water and battering Florida.

In Puerto Rico, Hurricane Maria has made food, water and fuel scarce.

The Federal Reserve has warned that the impact of the three hurricanes will complicate short-term economic forecasts.

Storms normally depress economic activity as they hit, but business then picks up as the recovery takes hold and infrastructure spending resumes.

Huge losses after hurricanes

The combined economic cost of Hurricanes Harvey and Irma could reach $290 billion, equivalent to 1.5 percent of the US gross domestic product, US forecaster AccuWeather said in a report Sunday.

“We believe the damage estimate from Irma to be about $100 billion, among the costliest hurricanes of all time,” said the firm’s CEO and founder Joel Myers.

Harvey, which battered Texas and parts of Louisiana in late August, will be “the costliest weather disaster in US history at $190 billion or one full percentage point of GDP” which stands at $19 trillion.

The report said it arrived at the figure by calculating disruptions to business, increased unemployment rates for significant periods of time, damage to transport and infrastructure, crop loss including a 25 percent drop of orange crop, increased costs of fuels including gasoline, heating oil and jet fuel, household damages and loss of valuable documentation.

Only a fraction of the losses would be covered by insurance, said Myers. – Agencies